How One Company Is Dealing With Higher Commodity Prices
Stocks
are higher with a strong ISM reading of 61.4, slightly below the consensus of
62. It
was the first time the index has remained at this level since 1983. The Nikkei
gained 2.5%, breaking the 11,250 level.
JP Morgan downgraded Intel
(
INTC |
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PowerRating)
ahead of its mid-quarter update to neutral citing concerns over INTC’s notebook
sales and leveling off of sales as a whole. The Semiconductor Industry
Association forecasts a 19.4% worldwide sales growth in chips for 2004. JPM also
downgraded AMD
(
AMD |
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PowerRating), as it predicted pricing pressure from Intel
over its flash memory products.
Commodities such as aluminum,
lumber, and copper, silver continue to make multi-year highs. Companies
benefiting from this boom include Phelps Dodge
(
PD |
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PowerRating), Alcoa,
(
AA |
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PowerRating)
and U.S. Steel
(
X |
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Chart |
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PowerRating). Maytag
(
MYG |
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PowerRating) is cutting costs to offset
higher steel prices.
The FDA is willing to approve Sepracor’s
(
SEPR |
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News |
PowerRating) sleeping pill if
certain conditions are met. The FDA didn’t ask for more patient testing info
which will allow SEPR to save a significant amount of time and money. SEPR is up
45% today.
| Dow | +67.40 |
10652.49 |
| S&P 500 |
+7.17 | 1152.59 |
| Nasdaq | +11.62 | 2041.45 |
The day’s leading sectors are
Oil Services
(
OSX.X |
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Chart |
News |
PowerRating) +1.99%, Energy
(
DXE.X |
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Chart |
News |
PowerRating) +1.84%,
Chemical
(
CEX.X |
Quote |
Chart |
News |
PowerRating) +1.51%, Airlines
(
XAL.X |
Quote |
Chart |
News |
PowerRating) +1.49%.
Weak today are Health
Providers
(
RXH.X |
Quote |
Chart |
News |
PowerRating) -2.41%, Biotechs
(
BTK.X |
Quote |
Chart |
News |
PowerRating) -0.67%,
Economic news releases included
lower personal income at 0.2%, with a 0.1% increase in personal spending at
0.4%. Construction spending fell by 0.3% and the ISM index lower at 61.4.
10-year Notes are +15 at
115 105
Dollar is +0.22 at 87.64
Gold is +3.90 at 400.60
Crude Oil is +0.16 at
36.32
Euro is +0.56 at 124.87
Volume is 675,000,000 on
the NYSE, and 809,000,000 on the Nasdaq.
Market breadth is positive.
| NYSE | Issues | |
| Advancing | 2313 | Up Vol 536 |
| Declining | 825 | Down Vol 119 |
| Ratio | 2.82 | 4.42 |
| Nasdaq | ||
| Advancing | 1857 | Up Vol 555 |
| Declining | 1168 | Dow Vol 225 |
| Ratio | 1.51 | 2.46 |
Top Dow stocks are:
Alcoa [AA|AA],
+2.77% at 38.49, Caterpillar
(
CAT |
Quote |
Chart |
News |
PowerRating), +2.08% at 77.28, Kodak [EK|EK]
+1.79% at 29.06, Disney [DIS|DIS],
+1.72% at 26.91.
Stocks in the news:
Cytyc
(
CYTC |
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Chart |
News |
PowerRating) announced a deal to
purchase Novacept, a maker of menorrhagia treatment system for $325 million in
cash. The deal is expected to result in a one-time $20 million charge and
positively affect the company in 2005. CYTC is up 14% on the news.
Impax
(
IPXL |
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Chart |
News |
PowerRating) received tentative
approval from the FDA to sell its generic version of allergy medicine Allegra-D
pending results of the Aventis
(
AVE |
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Chart |
News |
PowerRating) lawsuit over patent infringement
Universal Health Services
(
UHS |
Quote |
Chart |
News |
PowerRating)
said its first-quarter earnings may be 25% lower than a year ago due to weak
patient admissions and a rising debt expense from uninsured patients. UHS had
and EPS of 84 cents the same period a year go.
Brice Wightman